Fri Sep 20 07:23:56 UTC 2024: ## Sugar Prices Soar to Five-Month High Amidst Global Supply Concerns
**Brisbane, Australia** – The global sugar price has surged to a five-month high this week, reaching over 22 US cents per pound, driven by a combination of factors including drought in Brazil and tight global supply.
According to Tom McNeill, Director of Green Pool Commodities, the price hike began with news of cane crops in Brazil being destroyed by bushfires, impacting an estimated 3-5 million tonnes of production. However, the more significant factor is the ongoing drought in Brazil, which is impacting yields and causing concerns about available supply for the next quarter.
“The fires were a dramatic event that made the market focus on how much has already been shipped [out of Brazil], what little there is to ship in the next quarter, and that yields [in Brazil] are falling sharply,” said McNeill.
Further pressure on global sugar stocks comes from weather disruptions in other key producing nations like India and Thailand. These factors have led to a realization that global sugar supply is tight, with McNeill estimating a deficit of 1-2 million tonnes in the first quarter of 2025 alone.
This shift in market sentiment has pushed sugar futures to a five-month high, with Queensland Sugar Limited (QSL) noting that the bullish momentum has attracted the attention of speculators.
The price turnaround has been remarkably swift, prompting growers to lock in prices, which are now significantly higher than in recent months. While a strengthening Australian dollar slightly dampens the gains, the surge in sugar prices is expected to be beneficial for Australian growers and sugar mills.
Sugar futures had been declining for much of 2024, but reached highs of over $800 a tonne last year. The current spike in prices is a welcome boost for the industry, highlighting the impact of global supply chain disruptions and weather events on commodity markets.
First Piper 